Will Fiscal Policy Be Effective Under EMU? PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download Will Fiscal Policy Be Effective Under EMU? PDF full book. Access full book title Will Fiscal Policy Be Effective Under EMU? by Mr.M. Cangiano. Download full books in PDF and EPUB format.
Author: Mr.M. Cangiano Publisher: International Monetary Fund ISBN: 1451975554 Category : Business & Economics Languages : en Pages : 33
Book Description
European Economic and Monetary Union does not envisage creating a central fiscal authority. Monetary and exchange rate policies will be centralized, but fiscal policy will remain a national responsibility, in line with the subsidiarity principle. This paper argues that monetary union will generate pressures for closer economic integration than currently envisaged. Although not a necessity, a more active central role could then be justified on the grounds of allocative efficiency, redistribution, and stabilization. While in the short term enhanced policy coordination may address those pressures satisfactorily, as economic integration proceeds, the case for a central fiscal authority may become stronger.
Author: Mr.M. Cangiano Publisher: International Monetary Fund ISBN: 1451975554 Category : Business & Economics Languages : en Pages : 33
Book Description
European Economic and Monetary Union does not envisage creating a central fiscal authority. Monetary and exchange rate policies will be centralized, but fiscal policy will remain a national responsibility, in line with the subsidiarity principle. This paper argues that monetary union will generate pressures for closer economic integration than currently envisaged. Although not a necessity, a more active central role could then be justified on the grounds of allocative efficiency, redistribution, and stabilization. While in the short term enhanced policy coordination may address those pressures satisfactorily, as economic integration proceeds, the case for a central fiscal authority may become stronger.
Author: Marco Cangiano Publisher: ISBN: Category : Languages : en Pages : 32
Book Description
European Economic and Monetary Union does not envisage creating a central fiscal authority. Monetary and exchange rate policies will be centralized, but fiscal policy will remain a national responsibility, in line with the subsidiarity principle. This paper argues that monetary union will generate pressures for closer economic integration than currently envisaged. Although not a necessity, a more active central role could then be justified on the grounds of allocative efficiency, redistribution, and stabilization. While in the short term enhanced policy coordination may address those pressures satisfactorily, as economic integration proceeds, the case for a central fiscal authority may become stronger.
Author: Mr.Francesco P. Mongelli Publisher: International Monetary Fund ISBN: 1451951272 Category : Business & Economics Languages : en Pages : 37
Book Description
This paper examines the interest spending and taxation channels through which EMU could affect the public finances. It provides a framework for examining different views on a further narrowing of interest rate differentials. A model of Blanchard and Fischer is amended to analyze the two channels, and empirical evidence on the tax harmonization process is presented. The paper argues that “high-debt” and “high-tax” countries pursuing prudent fiscal policies could benefit the most from EMU: if monetary and widespread fiscal discipline are jointly established, interest rates could decline rapidly, while tax harmonization is likely to be gradual.
Author: Francesco Forte Publisher: ISBN: Category : Languages : en Pages :
Book Description
Purpose - The aim of the paper is to evaluate fiscal adjustments that have occurred in the Economic and Monetary Union (EMU) countries in the last 35 years, and their consequences on the economic growth process by using the mean group (MG) estimators.Design/methodology/approach - Our emphasis is on the effects of different composition of fiscal stimuli and consolidations. We compare the effects on the economic growth rate of different compositions of major fiscal changes. We use a cyclically adjusted value of the fiscal variables to leave aside variations of the fiscal variables induced by business cycle fluctuations.Findings - Our empirical research of the effects of large changes in fiscal policy, both in case of a fiscal consolidation and of fiscal stimulus in the 18EMUcountries from 1980 to 2015, shows that adjustments by cutting current expenditures, rather than by tax increases are more likely to boost economic growth. It also shows that cuts of investment expenditures may reduce GDP growth. During fiscal stimulus episodes, tax cuts and public investments are more likely to increase growth than current public expenditure.Originality/value - This is the first study devoted to the EMU countries. It should be underlined that the results obtained as for EMU countries are not necessarily applicable to other countries, as the different government size as well as different market institutions may influence the results.
Author: Norbert Berthold Publisher: International Monetary Fund ISBN: 1451850522 Category : Business & Economics Languages : en Pages : 34
Book Description
EMU started with eleven member countries as scheduled on January 1, 1999. The paper shows that the primacy of politics over economics in this decision could have serious consequences concerning the stability of EMU in the transition phase. Speculative attacks against currencies which are in economic distress due to asymmetric shocks can still happen. A speculative attack as such cannot force a country out of EMU. However, the country concerned might voluntarily decide to leave the system as the costs of staying inside EMU, e.g., due to further rising unemployment, become too large to bear.
Author: Richard Hemming Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 62
Book Description
This paper reviews the theoretical and empirical literature on the effectiveness of fiscal policy. The focus is on the size of fiscal multipliers, and on the possibility that multipliers can turn negative (i.e., that fiscal contractions can be expansionary). The paper concludes that fiscal multipliers are overwhelmingly positive but small. However, there is some evidence of negative fiscal multipliers.
Author: Marco Buti Publisher: Oxford University Press ISBN: 9780198294771 Category : Business & Economics Languages : en Pages : 280
Book Description
With the advent of the third and final phase of European and Monetary Union (EMU), the debate over European monetary unification is at the top of the political and economic agenda. Much has been written over the past five years about whether EMU is justified given the various expected benefitsand prospective costs, but there has been little detailed material on how EMU will work and what the practical implications of it will be for Europe as a whole. Economic Policy in EMU is a comprehensive look at the mechanisms involved, likely effects on monetary and budgetary policy, and the ways in which monetary union will deal with and affect business cycles and regional differences. It combines rigorous analysis of how the European economy works withan insider view of how this will change after 1999: as such, it is vital reading for all involved in the most important topic facing Europe today.
Author: Luca Lambertini Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
We examine, in a suitable theoretical framework, the relations between monetary and fiscal policies within the European Economic and Monetary Union (EMU). Our stylized setup of EMU includes the following political agents, each endowed with an objective function: (i) A central authority (EC), which aims at maximizing a Social Welfare criterion; (ii) National Fiscal Authorities (FA), which pursue domestic output stabilization, (iii) the European Central Bank (ECB) which has a mandate to stabilize inflation. In this context we ask the following questions: - How would the EC want to direct (or coordinate) the national FA? - Do the EC decisions make control of inflation (the ECB mandate) easier or more difficult? - Do national FA have an incentive to obey to or to deviate from the EC directives? In response to the last question, our main result is that national FA may have an incentive to deviate, even if we exclude time-inconsistent motives in their preference functions, or motives linked to a failure to internalize aggregate demand spillovers. In particular, even in the absence of asymmetric shocks and of aggregate demand spillovers, EC authorities and national governments may have conflicting incentives, depending upon the relative size of disturbances to aggregate demand and supply. When both aggregate demand and supply shocks are positive (resp. negative) and the latter are large enough in absolute terms, then national governments will pursue a more expansionary (resp. contractionary) fiscal policy than it would be desirable from the point of view of social welfare. Our results imply that, if the EC authorities are required to enforce a social welfare function defined over aggregate output and inflation, then it may be necessary to endow the EC with appropriate enforcement devices with respect to the fiscal policy stance of individual member countries. This points to the necessity of having institutions (such as the Stability and Growth Pact, SGP) which help to coordinate and discipline the fiscal stance of member countries. While we do not discuss the specific provisions of the SGP, our conclusions strongly support the idea that the setting of fiscal policies by member countries needs to be disciplined, and in some instances possibly over-ruled, by the EC authorities.
Author: Mr.Nathaniel G Arnold Publisher: International Monetary Fund ISBN: 1484348206 Category : Business & Economics Languages : en Pages : 57
Book Description
This note outlines a concrete proposal for a euro area CFC that could help smooth both country-specific and common shocks. Specifically, it proposes a macroeconomic stabilization fund financed by annual contributions from countries used to build up assets in good times and make transfers to countries in bad times, as well as a borrowing capacity in case large or persistent shocks exhaust the fund’s assets. The note also discusses several features aimed at avoiding permanent transfers between countries and making the CFC function as automatically as possible—to limit the scope for disputes over its operation—both of which are important points to make it politically acceptable.
Author: Mr.M. Cangiano
Author: Mr.M. Cangiano
Author: Marco Cangiano
Author: Marco Buti
Author: Mr.Francesco P. Mongelli
Author: Francesco Forte
Author: Norbert Berthold
Author: Richard Hemming
Author: Marco Buti
Author: Luca Lambertini
Author: Mr.Nathaniel G Arnold